In Tuesday’s pre-market, U.S. index futures indicate a lower
opening, as investors and analysts eagerly await the release of
earnings reports from major banks, which promise to offer valuable
insights into the current condition of the American consumer and
the broader economic outlook.
At 5:26 AM, Dow Jones futures (DOWI:DJI) fell 196 points, or
0.52%. S&P 500 futures dropped 0.60% and Nasdaq-100 futures
retreated 0.77%. The yield on 10-year Treasury bonds was at
4.007%.
In the commodities market, West Texas Intermediate crude oil for
February rose 0.87% to $73.31 per barrel. Brent crude for March
rose 1.20%, near $79.09 per barrel. Iron ore with a 62%
concentration level, traded on the Dalian exchange, fell 0.6%, to
$130.65 per metric ton.
On Tuesday’s economic agenda, investors await the Empire State
manufacturing activity index for January, published by the New York
Fed at 08:30 AM.
European stocks faced an unfavorable opening on Tuesday,
reacting to information from the World Economic Forum in Davos. The
Stoxx 600 index fell, with banks showing notable declines.
Significantly, speeches at the Forum, including leaders such as Li
Qiang, Ursula von der Leyen, Jake Sullivan, and Volodymyr
Zelenskyy, are drawing attention on Tuesday. The Forum, under the
theme “Rebuilding Trust”, discussed urgent economic and
geopolitical issues. In the UK, wage growth slowed to 6.6%, and job
vacancies decreased.
Asian markets suffered declines, led by Hong Kong and Japan.
Hong Kong’s Hang Seng fell 2.06%, while Japan’s Nikkei 225 ended
its six-day winning streak, closing down 0.79%. The S&P/ASX 200
in Australia and South Korea’s Kospi also recorded declines. On the
other hand, China’s mainland CSI 300 index rose 0.61%. These
movements occur in a context of mixed economic data, including the
stability of Japan’s corporate goods price index and concerns about
a recession in the U.S.
Friday’s session saw two-year U.S. Treasury yields hit their
lowest level since May due to a surprising drop in the Producer
Price Index. This raised expectations of interest rate cuts by the
Federal Reserve, with an 80% chance of a reduction in March.
Bitcoin fell, while oil rose following attacks in Yemen. The Dow
Jones dropped 118.04 points, or 0.31%, to 37,592.98 points. The
S&P 500 rose 3.59 points, or 0.08%, to 4,783.83 points. The
Nasdaq advanced 2.57 points, or 0.02%, to 14,972.76 points. Last
week, the Nasdaq gained 3.1%, the S&P 500 advanced 1.8%, and
the Dow rose 0.3%.
For this Tuesday’s quarterly earnings front, scheduled to
present their financial reports before the market opens are
Goldman Sachs (NYSE:GS), Morgan
Stanley (NYSE:MS), Applied Blockchain
(NASDAQ:APLD), PNC Financial (NYSE:PNC), and
others. After the market close, the numbers from
Interactive Brokers (NASDAQ:IBKR),
Progress Software (NASDAQ:PRGS), Pinnacle
Financial Partners (NASDAQ:PNFP), Fulton Financial
Corp (NASDAQ:FULT), among others, will be awaited.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple has reduced the
prices of some iPhones by up to 5% in China due to growing
competition in the smartphone market, seeking to boost sales in a
competitive market. iPhone 15 sales were disappointing, with local
rivals like Huawei gaining ground. Additionally, Apple may
circumvent the import ban of some Apple Watch models, due to a
patent dispute with Masimo (NASDAQ:MASI), through
an undisclosed redesign. Apple stated that the modified watches
“definitely do not contain pulse oximetry functionality”.
Microsoft (NASDAQ:MSFT) – Microsoft will offer
the “Copilot Pro” subscription for $20/month, allowing enhanced
access to its AI. This subscription integrates AI into popular
Microsoft apps, and the minimum requirement of 300 users for the
enterprise version has been removed, making the service more
accessible to smaller businesses, competing with Google in the
enterprise AI market.
Microsoft (NASDAQ:MSFT),
Vodafone (NASDAQ:VOD) – Vodafone and Microsoft
have entered into a 10-year partnership to expand digital and cloud
services to over 300 million customers in Europe and Africa.
Vodafone will invest $1.5 billion in Azure-based AI and replace
physical data centers with more efficient cloud services. Microsoft
will become an investor in Vodafone’s IoT platform and help expand
its mobile financial platform in Africa. The collaboration aims to
improve customer service with AI, including a TOBi chatbot, and
promote sustainability with “digital twins” for process
improvements.
Taiwan Semiconductor Manufacturing (NYSE:TSM) –
TSMC is expected to announce a 23% drop in fourth-quarter profit,
due to strong performance in 2022. However, the company projects
better growth in 2023, driven by a recovery in semiconductor
demand. Last quarter’s revenue exceeded expectations, reflecting
the depletion of electronic device manufacturers’ inventories.
Analysts are optimistic about demand for Apple’s wafers, and TSMC’s
report is scheduled for Thursday.
Baidu (NASDAQ:BIDU) – Baidu has denied any
connection to a Chinese military lab after a report on the matter
caused its shares to plummet. The company stated it has not
commercially collaborated or provided customized services to the
authors of an academic paper and that there was no physical link
between its AI system and the Chinese military lab. The initial
report was corrected by the South China Morning Post.
Wipro (NYSE:WIT) – Shares of the Indian tech
consultancy Wipro rose after beating profit expectations for the
third quarter, driven by an increase in large deals. CEO Thierry
Delaporte stated there were signs of a return to growth in IT
consulting.
Tesla (NASDAQ:TSLA) – Tesla’s CEO Elon Musk
wants at least 25% voting control in the company to lead in
artificial intelligence and robotics. He would consider a two-class
share structure but is facing post-IPO hurdles. Musk is willing to
build products outside of Tesla if necessary, should he not gain
sufficient influence.
Stellantis (NYSE:STLA) – Stellantis plans to
temporarily lay off about 2,250 workers at its Mirafiori plant in
Italy due to weak demand. The layoffs will occur from February 12
to March 3, affecting workers producing the electric Fiat 500 and
Maserati models.
Toyota Motor (NYSE:TM) – Toyota plans to
manufacture approximately 10.3 million vehicles globally in 2024,
renewing its annual production record for the second consecutive
year. Strong demand for hybrid vehicles and the easing of
semiconductor shortages are driving this increase in
production.
Boeing (NYSE:BA) – Boeing faces new delays in
737 MAX jet deliveries to China following an incident with an
Alaska Airlines plane (NYSE:ALK). China Southern Airlines will
delay receiving the MAX 9 planes to conduct additional safety
inspections, while Beijing awaits more information from U.S.
investigations. This affects Boeing’s relationship with China,
which has already faced previous suspensions of orders and
deliveries due to safety issues.
Embraer (NYSE:ERJ) – Embraer expects its
agricultural aircraft Ipanema to set a new delivery record in 2024,
driven by Brazil’s robust agricultural sector. Deliveries are
expected to reach 70 units, surpassing the previous record of 67 in
2011, due to growing demand in the country, one of the world’s
leading agricultural producers. The Ipanema is used for
agricultural spraying and has been a success among Brazilian
farmers. Each plane is sold for 3.6 million reais (approximately
$741,412).
Gol Linhas Aereas Inteligentes (NYSE:GOL) – The
Brazilian airline was considering filing for Chapter 11 bankruptcy
protection in the United States. Gol is seeking ways to manage high
debt and exploring financial options to strengthen its balance
sheet.
Shell (NYSE:SHEL) – Shell agreed to sell its
onshore oil business in Nigeria for over $1.3 billion to a local
consortium called Renaissance. The transaction, subject to
government approval, allows Shell to exit a challenging operating
environment in the Niger Delta while maintaining a presence in the
country. In addition to the initial sale price, Shell will receive
up to $1.1 billion in additional payments after completion. The
sale reflects Shell’s strategy of portfolio simplification and
focus on disciplined investments in integrated positions and
deep-water gas in Nigeria.
Berkshire Hathaway (NYSE:BRK.A) – Warren
Buffett’s Berkshire Hathaway has been increasing its stake in
Japan’s five largest general trading companies since last summer.
The stakes could reach 9.9%, pending board approvals. The company
holds shares in firms such as Sumitomo, Mitsubishi, Mitsui, Itochu,
and Marubeni, which are diversified conglomerates in the Japanese
economy. Japan’s stock market is booming, with the Nikkei 225 index
exceeding its highest levels since 1990. Berkshire Hathaway views
these investments as long-term and aims to own 9.9% of each of the
five companies.
Blackstone (NYSE:BX) – Blackstone, the world’s
largest alternative asset manager, plans to double its private
equity team in Singapore over the next two years, seeking
opportunities in Southeast Asia and getting closer to investors.
The expansion follows the trend of global managers establishing
offices in Singapore.
Goldman Sachs (NYSE:GS) – Goldman Sachs revised
its U.S. GDP growth estimate for 2024 upwards to 2.3%, surpassing
the previous forecast of 2.1%. The financial institution
highlighted expectations of more robust economic growth and reduced
recession risk in a statement on Sunday.
Morgan Stanley (NYSE:MS) – Morgan Stanley will
release its fourth-quarter results and strategic outlook under new
CEO Ted Pick’s leadership. Earnings per share of $1.07 are
expected, down from $1.31 the previous year. Investors are watching
the wealth management unit and the strategy of building connections
between workplace businesses and wealth management operations.
Thomson Reuters (NYSE:TRI) – Thomson Reuters
increased its offer to acquire Swedish billing and tax solutions
company Pagero by 25% to approximately $789 million. With about 54%
control, it surpassed rival bids, valuing Pagero at 8.1 billion
kronor. Vertex withdrew its previous offer, making Thomson Reuters’
new offer 39% higher than before. The acquisition strengthens
Thomson Reuters’ position in the tax and accounting services
market.
Kroger (NYSE:KR), Albertsons
(NYSE:ACI) – Supermarket chains Kroger and Albertsons plan to delay
the closure of their $24.6 billion merger to the first half of
Kroger’s 2024 fiscal year, instead of early 2024, due to antitrust
concerns and ongoing regulatory investigations. Kroger will invest
in price reductions and improvements in customer experience.
FedEx Corp (NYSE:FDX) – FedEx reported that it
has not seen significant changes in air transport due to
disruptions in the Red Sea. While maritime transport accounts for
90% of global trade, so far, the impact has been limited. CEO Raj
Subramaniam stated that air freight rates have remained stable,
while the Houthi militia attacks have not caused major changes in
the air transport sector.
AstraZeneca (NASDAQ:AZN) – AstraZeneca stated
that it has not faced supply issues due to transport disruptions in
the Red Sea caused by Houthi militant attacks in Yemen. The company
is closely monitoring the situation but did not reveal details
about its supply lines
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